If you don’t keep score, how do you know when you are winning? Now there is your list of dreams, an indispensables road map to happiness. Some of us though, happen to like big neat targets we can obsess over. Like ONE MILLION DOLLARS.
Peter: Ahem…well, don’t you think we should maybe ask for *more* than a million dollars? I mean, a million dollars isn’t exactly a lot of money these days. Virtucon alone makes over nine billion dollars a year!
Shane: Really?
Peter: Mm-hmm.
Shane: That’s a number. Okay then. We hold the world ransom for…..One hundred..BILLION DOLLARS!!
I was reading the web when I saw a post by Cristian Dorobantescu from energybyte.com which asked these questions:
Question 1: “What is the minimum amount it would take to make you feel OK about your entrepreneurship?”
I’ve been thinking about this. After all, there is feeling ok and there is successful. Julie & I have four goals. Control a million, have a million, earn a million, pacify a million. (courtesy of Gary Keller’s investing book)
Control a million: Control a million means the assets in my balance sheet exceeds a million. In simple terms, I may “own” my house (asset), but since I have a mortgage, the bank has controlling interest in it (liability). So all the things you own total more than a million.
It took some focus, but wasn’t too bad. I am 50% partner in a design/dev firm. We are buying a 925k duplex. Got a bit of doe in our retirement accounts and the obligatory large pile of stuff and nicknacks. As soon as the duplex closes (November 15th – fingers’ crossed), that is accomplished. I can’t tell you how stoked I am.
Own a million: This time, I subtract the liabilities (what I owe) from the assets (what I own) and have a million left over. Basically, if I sold it all off, I have a million in cash I can roll around in.
I think this is where I start to feel like my efforts are bearing fruit. Personally, Julie and I are making good headway, though we are not that close yet. We probably have something around 250-300k. I think it would be fun to figure this out, so I will write about it when I do. Seems like most entrepreneurs think this is major marker #1 and I agree it holds some weight.
Earn a million: Annual net profit of a million. Means when it’s all said and done (pre tax), each and every year, our bank account weighs in a million heavier than it did last year. Alright. At this point, I feel pretty cool! This is where I begin to consider someone has a truly successful business. It allows you the luxury of making mistakes as long as you don’t over-inflate your lifestyle. After all, if you make a million a year, invest 25k in a small company and loose it all, that stinks but you’re spouse probably wont throw you out a window. After all, there is another million coming next year. Of course, it is all philosophy to me, but I have in good authority that this is where you want to be.
Pacify a Million: As my odd friend Ali G would say: ‘Buyakasha’. Use the active revenue to transition to a more passive earning model. Basically, figure out how to get your money into investment scenarios that create more revenue that does not require your personal involvement. Goal: financial freedom. Set up your income flow so that it has no impact on your daily life decision making.It’s a lot easier to buy apartment buildings, invest in companies and make real money when you have money. So once we are slightly rich, we can focus on getting honestly wealthy.
Question 2: “What is the most difficult challenge that you face in reaching it?”
Balance. I can focus for quite a while to exclusion of everything else. But that is not in my personal definition of success. I strongly believe that money is just an enabler to do the things you want. Like spend time with family. But, if you have no family left by the time you make your money, what’s the point?
The toughest of those three goals? Definitely the third. For some reason (maybe the power of inflation x time), I have no doubt we will hammer out that second one in the near future. Of course, if you just manage to stay alive long enough and live in the first world, you are a guaranteed millionaire.
According to Jared’s post in response, the most common answers were:
● Having a million dollars in the bank is the minimum amount to feel ok about your entrepreneurship.
● The most difficult challenge is to make the first million.
Conclusion
During a hot tub meeting with Peter last week, we had this discussion on how most of the people we know our age don’t have a focused plan to become multimillionaires. With the power of inflation marching along, it’s not like any of us have a choice, we either pull it off eventually, or the tax payers will have to provide the solution. The mega corps just aren’t going to carry the bulk of American’s through to the grave. That means it is in our hands. I guess we are finally starting to return to the country of our forefathers. Good time to become a contractor and build a micro/small business.